Individuals with 5 percent or more ownership stake in high-risk businesses in the extractive, financial, insurance and real estate industries, according to the Registrar-General’s Department (RGD) will be declared as Beneficial Owners.
Foreign politically exposed persons with 5 percent ownership stake in any type of business will also be classified as Beneficial Owners by the RGD.
Also, individuals who own 20 percent or more of the shares of a company will be labeled a Beneficial Owner of the company.
The aforementioned classification of Beneficial Owners by the RGD follows the introduction of the Beneficial Ownership Transparency Regime as part of the RGD’s company registration processes under the new Companies Act, 2019 (Act 992).
Announcing the introduction of the new requirement via a press statement dated Monday, March 29, the Department instructed that all companies compile, verify and validate their Beneficial Owners before submission of company registration documents to the Department by June 30, 2021.
For new and already existing companies, details of their respective Beneficial Owners are to be provided during:
- Incorporation of a Company
- Annual Returns filing
- Amendment of Company Information
- Upon Request by the Registrar
The Department however, cautioned that companies that do not declare their Beneficial Owners or provide false or misleading information to the Department will be sanctioned.
According to the RGD, one of the purposes for which the Beneficial Ownership Regime is being added to the company registration processes is to ensure that companies know who they are transacting business with.
A Beneficial Owner (or Owners) is the individual or natural person who owns, controls and has interest in, or exercises influence over the legal person (or arrangement) or receives substantial benefit from the activities of the company.
